Bitcoin Treasury Firm DeFi Technologies Rockets 25% After Major Q3 Profits

Canadian fintech firm DeFi Technologies (DEFTF) stock surged over 25% this week after the company’s crypto trading desk kickstarted July with another round of immense profits.

Shares in the company rocketed to USD $1.64 on Wednesday, up from $1.27 on July 11. The share price has since corrected alongside Bitcoin’s price to $1.47 at time of writing, but is still up 15.4% since, outperforming BTC itself.

The bulk of DEFTF’s gains came on Tuesday, when the company announced it had generated $14.1 million in “low-risk arbitrage trades” at its specialized trading desk, DeFi Alpha, since the start of the third quarter. That includes $2.9 million in Tether (USDT) and $11.2 million in “digital asset inventory.”

“The company has already generated approximately $105 million in revenue with about $10 million in annual costs with Q2 revenues yet to be announced,” Curtis Schlaufman, VP of communications at DeFi Technologies, told Decrypt. “This success highlights the effectiveness of our strategic trading operations.”

Bitcoin Treasury Strategy Boosts Stock Price of Canadian Firm DeFi Technologies

MicroStrategy’s Bitcoin treasury playbook has now spread to Canada, with a local crypto-focused public company embracing Bitcoin as its “primary treasury reserve asset.” DeFi Technologies, which trades on Cboe Canada under the “DEFI” ticker, is next in a growing list of global public companies to go big on BTC—and for remarkably similar reasons to its predecessors. “DeFi Technologies believes [Bitcoin] has unique characteristics as a scarce and finite asset, making it a reasonable hedge against...

Such revenue figures are remarkably high relative to the company’s total market cap, which is currently $429 million, according to Yahoo Finance. Popular crypto market analyst Will Clemente has repeatedly argued that the firm is both “misunderstood” and “undervalued” at its current valuation.

Clemente’s market research business, Reflexivity Research, was acquired by DeFi Technologies in January.

While DeFi Alpha has driven the bulk of DeFi Technology’s gains this year, Schlaufman said that their “core business” is still centered around Valour, its asset management subsidiary that provides dozens of crypto exchange-traded products (ETPs) in Europe.

Thanks to more lax regulations in the region, Valour offers ETPs for dozens of crypto assets that are foreign to North American markets, including Solana (SOL), Cardano (ADA), and more recently Near (NEAR). It can also stake the tokens within those funds, giving them much stronger profits per deposit than those from U.S. Bitcoin ETFs.

“We have ambitious plans to continue expanding our ETP offerings and to enter new and emerging markets, including the Middle East, Asia, and Africa,” Schlaufman said.

You Can Now Invest in a Bitcoin Fund and Earn Yield—In Nordic Countries

Canadian financial tech firm DeFi Technologies announced Tuesday that its subsidiary, Valour, has launched what it calls the first ever yield-bearing Bitcoin exchange-traded product (ETP). The company exclusively tells Decrypt that investors will get exposure to BTC and earn a 5.65% yield—provided those investors are located in its Nordic markets. "We are thrilled to introduce the world's first Yield Bearing Bitcoin ETP, offering investors an unprecedented opportunity to gain exposure to Bitcoin...

Last month, DeFi Technologies told Decrypt that it expected to earn $15 million per quarter from Valour alone after Q1. Predicting the entire company’s profits can be difficult, however: “At the end of Q1, the Company had guided $87.45 million in revenue for 2024, which has already been surpassed,” Schlauffman continued.

Using its newfound profits this year, DeFi Technologies has expanded its balance sheet, paid down debt, and bought back its own stock.

Most notably, the company has joined a slew of MicroStrategy copycats in making Bitcoin its “primary treasury reserve asset,” buying 110 BTC for $7.6 million at the time. Like similar firms, DEFTF stock surged to multi-year highs after the announcement.

“We will continue to add more BTC as appropriate in relation to our Bitcoin treasury strategy,” Sclauffman confirmed.

Edited by Ryan Ozawa.